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Revision Flashcards

1
Q

Inheritance Tax

A

Step 1:
NRB - 325.000
RNRB - 175.000
Transferable NRB / RNRB

Step 2:
Value of estate passing on death + PETS + CLTs within 7 years of death - STOP

Step 3:
Deduct Exemptions (Spouse, Charity, Other)
STOP

Step 4:
Business Property Relief (BPR) / APR

Step 5:
Calculate +/- HT
RNRB => home
NRB => lifetime gifts chronology
All else = 40%
PETs / CLTs >= 3 <7 - Tapper relief
PETs < 3 = 40%
CLTs < 3 = 20%

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2
Q

PR not to distribute within 6 months after grant

A

Financial provision claim (IPFDA) criteria

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3
Q

PR not to distribute

A

Within 12 months of grant => matrimonial home = non-owning CP / spouse resident
(only under Intestacy Rules)

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4
Q

Distribution of gits under will

A

-> Chattels = upon delivery
-> Money for a specified fund => from that fund
-> Shares => no stock transfer form
-> Land => by assent?

1) Specific Gifts
2) General Gifts
3) Residue (after expenses)

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5
Q

Recourse for BS + Creditors against PRS

A
  1. Remove / substitute PRS
  2. Personal claim alt PRS
  3. Tracing claim from PR or 3PR
  4. Personal claim alt 3P
  5. Ask the court for admin proceedings
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6
Q

PRS liable for any loss to estate because of breach of duty

A

Relief from liability (PRS):
-> Will terms allow
-> S. 61 Trustee Act - acted honestly / reasonably & ought to be fairly excused; leave from court
-> Approval from BS

IF PRS first pay out gifts before debts = devastavit.
Fellow PRS not liable for each others’ actions unless negligently allowing it.

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7
Q

Intestacy

A

Right to matrimonial home by non-owning spouse / CP.
=> Can apply to PRS in writing until 12 months of grant
PRS advised to not distribute w/n in months if mat. home is there
=> Cannot sell matrimonial home w/n 12 months without consent of spouse / CP

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8
Q

PRS cannot receive a good receipt when giving a gift to a minor beneficiary

A

-> Minors - parents / guardians / PRs / trustees appointed can give good receipt

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9
Q

Measures to protect PR

A

-> Full searches / inquires
-> Request a good receipt of gifts
-> S.27 Advert (unknown BS / Cred.) -> in London Gazette or local newspaper + wait 2 months

-> Missing BS / Creditors => 5 options
1) Secure an indemnity from BS
2) Benjamin order from court => B treated as predeceased
3) Missing B or C insurance
4) Pay amount onto court
5) Presumed death order from court if missing >= 7 years

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10
Q

Blind, illiterate, unable to sign

A

Special attention clause or witness affidavit

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11
Q

Unable to sign criteria for validity

A

1) Testator gave directions to 3p to sign and 3p sign in T’s presence
2) Testator knows and approves the content of wish

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12
Q

Disclaimer

A

Let go of gift, unaccepted; next in line (Intestacy) or falls under residue (will)

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13
Q

Variation

A

Vary / direct gift to someone else => PET or CLT (result)
-> can have IHT / CHT implications
-> consider retrospective effect of IHT / CGT implications
Effect: Testator gave it to 3P directly

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14
Q

Requirements

A

In writing, w/n 2 years of death, from beneficiary to a specific 3P, specify:
+ subject + object;
+ note it is for the purposes of s.142 Inheritance Tax Act or s.62 Taxation of CGT;
+ not for consideration
-> Consider relationship between Testator and 3P

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15
Q

Insolvent Estate

A

Assets < Liabilities

For the benefit of creditors:
1. Secured creditors (extent of their security)
2. Unsecured creditors
=> statutory order;
=> costs / fees, preferred debts, unsecured debts, interest on preferred / unsecured debts;
=> debts to SP / CP
=> Interest on latter;
=> surplus

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16
Q

Solvent estate

A

Assets are sufficient to pay liabilities
-> s. 35 AOE

  1. Secured debts - usually born by the property (check will)
  2. Unsecured debts = Abatement
    -> Residue
    -> General + Demonstrative Gifts
    -> Specific gifts
    * Doctrine of Marshalling
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17
Q

Time to pay out gifts to BS

A

Until 1 year of death = the Executors year

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18
Q

Power of PRs

A

-> Appropriate (consent B/C)
-> Hold property (pay income to minors, discretion)
-> Invest (diversification)
-> Sale
-> Insure
-> Delegation agent = not liable unless negligent (via POA = liable)
-> Settle claims
-> (limited) run the business of the deceased

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19
Q

Role of PRs

20
Q

Duties of PRs

A

Fullest enquires and searches, act in good faith, due diligence, within reasonable time, get in the estate to collect assets, administer / distribute estate

21
Q

Rule a/t self dealing

A

Cannot acquire property of estate = voidable by any B
-> approve by BS
-> by court
-> terms of will

22
Q

Expedited Grant

A

Pending sale

23
Q

Limited Grant

A

Preserve estate

24
Q

Applying for Grant

A

-> Entitlement (Rule 20 + Rule 22 NCPR)
-> Value of estate: IHT to be paid (IHT 400) or not (if expected estate under NRB)
-> If paid to HMRC, HMRC stamps and sends forms to probate registry directly. First pay IHT & wait 20 working days for HRMC to send the forms

Process:
-> Submit application from (Forms PA1P or PA1A) online + statement of truth
-> Attach relevant docs (original + 2 copies A4)
-> pay application fees
-> grant issued w/n 16 weeks (usually)

25
Caveat
Opposition against an application for a grant -> up to 6 months valid; can be extended for another 6 months
26
Executors
Can manage estate via will or not Executors in right to renounce (same for admin) But right to reserve = only to executors Executors - 1 is enough (4 in total) Administrators = 2 if a minor interest or life interest (4 in total)
27
Grant of representation
Doc of authority to deal with the estate -> Appointing a PR = Executor = Grant of probate => form PA1P -> Appointing a PR unwilling or unable to act => Administrator = Grant of letters or admin with will annexed => form PA1P -> No will / not valid will => administrator => grant of simple letters of administration => form PA1A Grant of probate + with will annexed = rule 20 NCPR Grant of simple letters of administration = rule 22 NCPR "Clear off" previous entitlement
28
Forfeiture rule
B cannot benefit from someone they unlawfully killed; Manslaughter = apply for relief w/n 3 months of conviction
29
Unmarried couples
Not entitled under intestacy & if no will => but can make a financial provision claim = inheritance (provision for family and dependents) Act (to apply w/n 6 months of grant) Who can apply? Spouse / CP + former SP / CP if unmarried, children + stepchildren, co-habitee of 2 years + kids of co-habittee, any one financially maintained by Testator. Conditions: Testator didn't make a reasonable provision & Testator lived in England and Wales on date of death. What court considers: Financial resources of A, moral obligations, expectations of maintenance, deemed divorce factor for SP / CP
30
Partial Intestacy
-> Residue gift fails -> Not all estate via will Statutory order: - only spouse = all if live beyond 28 days after Testator's death - only issue = all to children in equal shares conditional on attaining 18 years of age or marriage / CP if earlier (s. 47 AEA if issue dies before Testator) - spouse & issue => spouse gets chattel, fixed sum of 322.000 GBP + 50% of residue => issue takes 50% of residue - no spouse / issue but relatives -> statutory order Parents --> Brothers and sisters (Whole blood) --> Brothers and sisters (Half blood) --> Grandparents --> Uncles and Aunts (Whole blood) --> Uncles and Aunts (Half blood) --> Treasury Solicitor (bona vacantia)
31
IHT
-> Gift to a lineal descendant = RNRB -> Gift to spouse = Spousal exemption -> Deceased spouse / CP left everything to spouse / CP = transferable NRB / RNRB Gift < 3 years = 40% or 20% of CLT Gift >= 3 and < 7 years = Taper relief (8x4) Charity exemption = 36% on the value of estate if 10% >= given to charity
32
Class Gifts
3 Cs: -> Certainty of object -> Certainty of subject -> Certainty of intention Contingent = first beneficiary to meet the condition closes the class
33
Insufficient funds to pay for all gifts (Solvent Estate)
Abatement: -> first, pay out specific gifts -> then, pay out general gifts -> then, lastly, residue Only specific gifts can be adeemed
34
Description of gifts
Date of death, unless "my", "now", "at present"
35
Description of beneficiaries
At the time of will, unless "all my children" = date of death; class gifts
36
Simultaneous deaths
Commorientes rule = the older died first
37
Beneficiary dies after Testator
=> Will - usually the gift vests, unless condition unfulfilled - then it fails unless s. 33 WA => Intestacy - 28 days survivorship rule spouse / CP; if sibling, issue, aunts or uncles, s. 47 AEA, unless under 18 / no CP / not married / no kids = then gift fails
38
Predeceased Beneficiary
Gift fails, unless: => will - terms; s. 33 WA (issue), survivorship rule => intestacy - s. 47 AEA (siblings, issue, aunts / uncles)
39
Mutual will
A contract between two parties not to revoke their wills
40
Revocation of mutual will
Property on constructive trust
41
Alterations on the will
s. 21 WA -> Not valid unless executed as a will; initials + 2 witnesses Dependent relative revocation - later gift only meant to be replaced if the amendment was valid -> Gift = witness affidavit or copy of will -> beneficiary = gift fails for uncertainty
42
Rectification of the will
Fails to carry out the Testator's intentions because of: - mistake - clerical error Apply within 6 months of grant
43
Payment of IHT
(Liability with PR; burden: depends) -> Legatee to pay up to 12 months of death -> PR needs to pay IHT within 6 months after month of death, after interest applies -> Arranged by PR Financial options: bank loan, beneficiary's funds, own funds, British bankers' Association payment scheme
44
Property passing outside of will or intestacy
(+ not included in IHT calculations) -> Life insurance policy writen in trust for another -> Discretionary Pension
45
Valid will
1) s. 9 WA Formalities 2) Testamentary mental capacity (Banks & Goodfellow/Parker/The Golden Rule) 3) Testamentary intention (generic/specific)

Wills & Probate (1 decks)

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